By Trevor Shackelford November 7, 2005 -- Standard Register, (NYSE: SR) announced their third quarter results today. The company reported revenue for the third quarter of $221.4 million, 4% higher than the $213 million reported for the same period last year. All business units contributed to the revenue increase, which represents the fourth consecutive quarter of top-line growth. Pre-tax income from continuing operations was $2.3 million, compared with a pre-tax loss of $56 million last year. The company reported EPS from continuing operations of $0.05 per share, compared to a loss of $1.23 per share last year. The improvement stems from fewer extraordinary expenses and a reduction in SG&A expenses. Contents of this Summary Quarter Highlights Segment Performance Guidance Raine Radar Q & A Quarter Highlights Gross margin for the quarter was $ 78.7 million, compared to $77.7 million reported for the same period in the prior year, indicating the company did a better job in the recovery of paper costs. Unit growth also contributed positively to the gross margin level SG&A expenses were down $2.3 million from last year due to cost reduction programs. Depreciation was $9.1 million, down from last year’s $10.4 million, due to lower capital spending in recent years. Excluding restructuring and impairment charges, third quarter operating results, before interest, swung from a loss of $1.3 million in 2004 to a $3.1 million profit this year. Net debt (debt plus cash) at the end of September, 2005 was $39.8 million, compared to $67.6 million last year. Net debt to capital ratio decreased to 16.8% from 25.8%. The board declared a quarterly dividend of $0.23 per share to be paid on December 9, 2005, to shareholders of record as of November 25, 2005. Segment Performance All segments contributed to the quarter’s revenue increased by 4% over the prior year revenue. “Despite a competitive marketplace, the company recorded unit growth in both the quarter and year-to-date periods and continue to make good progress in recovering the 2004 and 2005 material cost increases,” said CEO Dennis Rediker. Document and Label Solutions Segment The segment’s year-to-date revenues were $465 million, up 3% over the same period last year. Print-On-Demand Services (POD) Segment The segment’s year-to-date revenues were $180 million, up nearly 2% from last year. InSystems Segment The company reported year-to-date revenues for the segment of $8.4 million, up 5%. Digital Solutions and Other Segment The company reported year-to-date revenues for the segment of $25 million, up 50% over last year. Guidance The company’ financial guidance for fiscal 2005 remains unchanged from last quarter. The company continues to expect modest revenue growth for the full year, adjusted for the extra accounting week in 2004, and meaningful improvement in second-half 2005 percentage operating margins (excluding restructuring and impairment charges), versus the first-half 2004 base period. The company may, however, fall short due to its continued investment in digital pen and paper as well as print-on-demand services. Raine Radar Standard Register claims to be focused on delivering relevant “marketing” solutions, specifically in the area of 1-to-1, however it is unclear whether or not the company really understands the growth drivers behind this business. Of course it’s true that response rates are generally considered low, and achieving higher ROI in marketing is the current Holy Grail, but most of Standard Register’s competitors have been saying the same thing for at least two years. Right now, at least in the area of marketing, Standard Register appears to be behind the curve, instead of innovating on it. Some of their work in electronic bill pay, presentment, and e-procurement solutions actually seem to be a little more connected to their document management skill-set, and also appear to be growing a little better as well. Q & A Lower depreciation and lower CapEx spending were in line with the company expectations. The company is having difficulty recovering the increasing costs of energy. Operating revenue for InSystems segment is approximately breakeven. The company expects that lot of activities take place in POD and paper by work areas during the forthcoming period. The company hopes that in the content management industry, the InSystems product will have the room to grow while driving down the costs of SG&A, so that the business will enter positive territory. Management is also considering other strategies to accelerate the process of adding value to the company. Standard Register is looking to continue to drive an educational strategy leveraging the talent and technology the company has. The company believes in offering an open architecture and platform, which allows more customized solutions so that customers can focus on more specific internal issues. The company is focusing on marketing and providing one-to-one communications, believing that there is demand in the market for sophisticated products.